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Cash-in refinancings up

A record percentage of refinancings were cash-ins during the last three months of 2010, Freddie Mac reported Monday, Jan. 31.

Freddie Mac, which has been tracking refinancing patterns since 1985, said 46 percent of homeowners who refinanced their primary mortgages brought money to the closing to bring down their principal balance. In the third quarter, it was 35 percent, the mortgage giant said.

Borrowers who cashed out -- those who increased their loan balance by at least 5 percent -- represented 16 percent of all refinanced loans, the lowest cash-out share in Freddie Mac's records. During the third quarter, 18 percent of refinances were cash-out deals, Freddie Mac said. The average cash-out share during the past 25 years has been 62 percent of refinancings, the report said.

The median interest rate reduction was about 1.25 percentage points, or a savings of 22 percent in interest costs, Freddie Mac said.

"Consumers are generally shedding debt, and mortgages are just another way they're doing it," said Frank Nothaft, Freddie Mac vice president and chief economist.

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